YFII Yield Farming – the controversial $YFI fork

YFII (now formally known as DFI.Money) is a fork of the yEarn project (YFI) which offers a different token distribution model where token emissions are halved every week (YIP-8). This economic design encourages active participation in the mining of $YFII whilst allowing late-comers to still earn rewards. YFII functions as a governance token for the community – as tokens are required to vote on new decisions and implementations. As of this article, over $150 Million USD has been locked under the YFII pool 1– signifying the development of a strong community.

YFII is designed to have 3 different pools with each distributing 10,000 tokens on the first week of release (July 27th), with the amount halving every subsequent week.

The developers originally intended to implement this change via a governance vote “YIP8” – however, this was not passed by the community. This has led the creation of the YFII fork which directly implements a weekly halving model for YIP emissions. This has led to growing support for the project, especially in the Chinese community. $YFII shares a 98% code similarity to YFI, with the key difference being the “halvening” added clause – for more information check this comparison.

YFII governance interface is also a fork of Ygov.finance

YFII Launch controversies

The launch of YFII was controversial and initially met with scam accusations – as the western community feared YFII was an exit scam. This was mostly due to the presence of potential back-doors such a “minter” and “governance” addresses that could create any number of new tokens (infinite token risk). These issues were later resolved by the burning of the “governance address” and clarification of the “minter” addresses.

Metamask Phishing Detection Warning

Is it Safe to Yield Farm YFII

YFII is offering very high returns on investment, with pool 2 offering more than 2000% as of this article. The important question now is if it is safe to yield farm YFII. Metamask has issued Phishing warnings for the YFII site, likely a result of initial ‘report’ submissions warnings against the project.

The key point of contention was the presence of an ‘owner key’ which could have been used to create an infinite supply of YFII. This issue has been corrected by the community after the owner key was burned – meaning that no new tokens can be created without the community agreeing to it via governance votes. There have also been a few alarms raised by the Balancer project, where the YFII-DAI pool was deleted temporarily.

The Chinese Wechat community has been fast to call out against un-founded pre-justices against the project. Many have called Balancer centralized and potentially untrustworthy after these accusations/frontend censorship.

https://twitter.com/FinanceYfii/status/1288405347976192000?s=20

There is definitely a lot of risks using YFII – as with all decentralized finance projects and smart contracts.

Two Pools

Currently there are two pools to farm $YFI token – each has a distribution of 10,000 per week – decreasing by half every week (see chart below).

To find out more about the estimated Annual Percentage Yield (APY) generated by YFII farming, check out the farming tool by Weeb https://yieldfarming.info/yfii/ycrv/

How do you yield farm YFII

*NOTE: Yield farming is extremely dangerous and can include risks such as infinite mint / smart contract vulnerabilities / token price volatility. This activity is not SAFE and should be viewed as EXTREMELY experimental. You have been warned*

There are three different methods to mine YFII – all of them give different yields of YFII and have different associated risks. It’s not necessary to learn all of the methods – rather it’s important to understand they have different risk profiles.

  1. POOL 1: This uses the yCurve tokens generated on https://www.curve.fi/iearn.
    1. Log onto https://www.curve.fi/iearn
    2. On the Deposit page, deposit either USDT, USDC, TUSD or DAI
    3. This will generate yCurve tokens
    4. Stake yCurve Tokens on https://yfii.finance/#/ in the “yearn” pool
    5. RISKS: Y Curve Pool uses stable coins and automatically invests them into different protocols. This is considered high risk as any vulnerabilities in any of the protocols can lead to theft of funds.
  2. Pool 2: This uses Balancer’s 98% DAI: 2% YFFI liquidity pool
    1. Stake either YFII or DAI in the Balancer Liquidity Pool https://pools.balancer.exchange/#/pool/0x16cAC1403377978644e78769Daa49d8f6B6CF565
    2. This will generate BPT tokens
    3. Stake BPT tokens on https://yfii.finance/#/ in “Balancer (YFII-DAI)” Pool
    4. RISKS: Funds will be used to automate market making – meaning if the is a sudden large sell of YFII, then DAI tokens will be used to buy the YFII. This means price drops/volatility of YFII is a can lead to a reduction of pooled assets.
  3. Pool 3: Staking YFII in the “governance” Pool

After successful staking, you should be able to see “rewards available” increase over time with more YFFI tokens. Tokens can be claimed at any time using “claim rewards”. On top of this, staking staked tokens can also be unstaked at any time with no lockup.

YFII Governance

During the bootstrap phase of YFII, the developers have chosen to use a multi-signature governance model where power is shared between 11 signatories. For a resolution to be passed and enforced, 7 out of the 11 signatories need to approve the action using a gnosis-vault. This is a temporary measure that improves the speed of contract deployment whilst power is transitioned to the YFII governance DAO (YFII voters get to vote on what to implement). More information can be found about the 11 signers & twitter verification here: https://keys.yfii.finance.

YFII distribution

YFII distribution chart

YFII Wechat Group (Chinese)

YFII community has a large Wechat group. To find the group, search myGrassU and type 3 to receive an invite into the group. In an open letter from the YFII community, the creator of YFI was officially acknowledged with a badass photo.

YFII lists on Binance

Binance listed DFI.Money (YFII) on 1st September 2020 with the following trading pairs: YFII/BNB, YFII/BTC, YFII/BUSD and YFII/USDT. No listing fees were paid by YFII for this listing- clearly Binance listed YFII in response to the overwhelming popularity with DeFi farmers and enthusiasts. Popularity and community is a huge factor taken into Binance when deciding what to list, as revealed by Co-Founder and CEO Chengpeng Zhao (CZ) during our interview.

YFII’s listing on Binance gave them a huge boost, pretty much doubling the token’s value to over USD$8,000 in just one day.

FAQ

Is YFII Safe?

YFII has similar contracts to Synthetix and YFI – so it’s not a total scam. However, it has yet to be proven if YFII is safe due to potential mart contract vulnerabilities. YFII has not yet been audited

How do I add to the Balancer Pool 2

Unfortunate Balancer has removed the add liquidity feature on the Pool (due to fears of potential infinite minting risk). To add to Pool 2 you need to use the balancer fork provided by YFII

Where do I find the latest stats on YFII farming

You can use an unofficial too provided by WeeMcGee – https://yieldfarming.info/yfii/ycrv/

Decentralised Finance (DeFi) series: tutorials, guides and more

With content for both beginners and more advanced users, check out our YouTube DeFi series containing tutorials on the ESSENTIAL TOOLS you need for trading in the DeFi space e.g. MetaMask and Uniswap. We also take a deep dive into popular DeFi topics such as Yearn.finance ($YFI), Balancer ($BAL) and ($COMP).

The DeFi series on this website also covers topics not explored in YouTube. For an introduction on what is DeFi, check out Decentralized Finance (DeFi) Overview: A guide to the HOTTEST trend in cryptocurrency

Learn about Yearn.finance ($YFI) and all its various hard forks and iterations:

For in-depth information other specific DeFi projects, check out our DeFi token guides:

Tutorials and guides for the ESSENTIAL DEFI TOOLS:

More videos and articles are coming soon as part of our DeFi series, so be sure to SUBSCRIBE to our Youtube channel and (for now) FREE weekly newsletter so you can be notified as soon as they come out!

Resources:

  1. INFO : https://medium.com/@WhiteNoise1984/yfii-innovative-decentralized-defi-mining-pool-d745c032dfc0
  2. POOL : https://pools.balancer.exchange/#/pool/0x16cAC1403377978644e78769Daa49d8f6B6CF565
  3. FORK : https://bal.yfii.finance/#/pool/0x16cAC1403377978644e78769Daa49d8f6B6CF565 (Unofficial fork of Balancer pool. Use at your own risk.)
  4. STAKE : https://yfii.finance/
    CONTRACT : 0xAFfcD3D45cEF58B1DfA773463824c6F6bB0Dc13a
  5. how to see rewards btw https://yieldfarming.info/yfii/yfii_dai/

YFII Announcement: https://medium.com/@WhiteNoise1984/yfii-innovative-decentralized-defi-mining-pool-d745c032dfc0
YFII Token Address: 0xa1d0E215a23d7030842FC67cE582a6aFa3CCaB83

Unofficial Yield Farming Info:

Pool1: https://yieldfarming.info/yfii/ycrv/
Pool2: https://yieldfarming.info/yfii/yfii_dai/

The information provided in this article is intended for general guidance and information purposes only. Contents of this article are under no circumstances intended to be considered as investment, business, legal or tax advice. We do not accept any responsibility for individual decisions made based on this article and we strongly encourage you to do your own research before taking any action. Although best efforts are made to ensure that all information provided herein is accurate and up to date, omissions, errors, or mistakes may occur.


Michael
I’ve been involved in the Bitcoin and Blockchain space since 2012. Something I notice right away is that accurate factual information is hard to come by in this space. More often than not, we find extremely biased information that exploit the complexity of blockchain to obscure facts. The objective of this site is simple – to provide independent insights into the blockchain space.

3 COMMENTS

  1. Hello Michael,

    Thanks a lot for this insightful post.

    I have a question about YFII yield farming in POOL 1 (yEarn). What I don’t understand is how does yfii.finance make the connection with the USDT, USDC, TUSD or DAI I deposited on curve.fi. Basically, how does it know how much I invested there, so I can stake it’s equivalent on its platform?

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Stay Connected

13,855FollowersFollow
105,719FollowersFollow
216,000SubscribersSubscribe
- Advertisement -

Latest Articles

Developing story: OKEx suspends withdrawals…but is there more to this?

What happened? On 16th October 2020 OKEx suddenly announced that one of their private key holders (later confirmed to...

Stacks ($STX): Bringing Bitcoin’s security to decentralised apps

Stacks ($STX) (formerly Blockstack) is an open-source network that allows developers to easily build decentralised applications (such as decentralised finance DeFi applications)...

Linear Finance ($LINA): The future of synthetic exchange platforms?

Linear Finance ($LINA) understands that decentralized finance (DeFi) has opened new possibilities for derivative offerings and that many exchanges have the apparent...

Ledger Nano X Review: Best Bitcoin Wallet of 2020?

Ledger Nano X is the next generation of Hardware wallet with smartphone support, a larger screen and more storage space for Apps....

Ledger Nano S Review (2020): Bitcoin Wallet on a Budget?

Ledger Nano S is the most popular cryptocurrency hardware wallet (more than 1.4 Million units sold). The Nano S is the most...